The Council on Wage and Price Stability has told General Motors Corp. and Ford Motor Co. that their recent contract settlements with the United Auto Workers are in "probable noncompliance" with the government's anti-inflation wage guidelines.
Together, GM and Ford constitute the biggest target for possible disciplinary action under the year-old guideline program. But, practically speaking, there is little if anything the government can do even if it determines finally that the nation's two biggest automakers violated the standards.
The action was confirmed by government officials shortly after Sen. Edward M. Kennedy (d-Mass.) was reported to have criticized the Carter administration's enforcement of the anti-inflation standards. COWPS Chairman Alfred E. Kahn is expected to respond further to Kennedy's criticism at a meeting with reporters today.
Although the guidelines are currently undergoing revision by the president's Pay Advisory Committee, the GM and Ford negotiations were conducted under the first-year standard of 7 percent a year, or 22.5 percent compounded over three years, for wage and fringe benefit increases.
The UAW contracts at the two companies, covering a total of 650,000 workers, averaged about 10 percent a year, or 33 percent over three years, according to industry sources.
The companies have 10 days to respond to the government's notice, after which COWPS decides whether to label them as actual guideline violators.
Under the government's original guideline program, a certification of noncompliance would trigger contract sanctions, meaning a possible loss of millions of dollars worth of government business for GM and Ford. But the Carter administration has indicated it will not use this weapon so long as its fledgling "national accord" with labor and business, including the pay advisory committee, is functioning satisfactorily.
A spokesman for GM said company officials will meet next week with COWPS to discuss the contract. The company also reiterated its contention that its contract with the UAW and other unions is "in accord with the spirit and intent of the administration's anti-inflation program, which we have supported and continue to support."
Ford officials also confirmed that they received a "probable noncompliance" notice but made no other comment. COWPS has taken action on the Chryseler Corp. contract with the UAW, which is still subject to rank-and-file union ratification.